§ Mr. Ralph Howellasked the Chancellor of the Exchequer if he will update the reply given to the hon. Member for Norfolk, North, Official Report, 4 May 1978, column 248, showing starting rates of income tax and top rates in each of the United Kingdom, Germany, Netherlands, Canada, Denmark, the United States of America, Belgium, France and Japan.
§ Mr. Peter ReesThe information requested is given in the table below:
(a) Starting rates of income tax per cent UK 30 Germany 18 Netherlands 16–3 Belgium 15 Canada 15 Denmark 144 USA 14 France 7–2 Japan 7
(b) Top rates of income tax per cent UK 75 Japan 75 Belgium 72 Netherlands 72 USA 70 France 60 Germany 56 Canada 43 Denmark 39–6 NOTES
1. The rates are those for 1980 (1980–81) except in the case of France and Japan (1979) and Belgium (1978).
2. In all cases the starting rates are the lowest applicable when tax actually becomes payable. All figures relate to a married couple with two dependent children, except for the USA, where the rate shown is that at which a single person starts to pay tax. The starting rate of tax in the USA for a married man with two dependent children is 26–5 per cent., because of the progressive withdrawal of tax credits for such a person at this income level.
3. The top rates of tax shown are the highest charged. In some countries, however, employment income is charged at a lower top rate. For the UK, the rate is 60 per cent., for Japan 67–5 per cent. and for the USA 50 per cent.
4. Local taxes, which are not included in the table, can sometimes make a significant difference. In Denmark, the Copenhagen rate of tax raises the starting rate to 40–4 per cent. and the top rate to 65–6 per cent. In Canada, the Ontario rate of local tax raises the top rate to 61–9 per cent. Japan's top rate becomes 93 per cent. for investment income and 83–7 per cent. for employment income.
707W5. The rates shown may differ from the nominal rates of tax in the countries concerned, because they take account of any employment income reliefs, minimum expense deductions and other deductions. This is particularly true of Belgium, where the nominal starting rate is 50 per cent.